Owing to the depletion of world oil reserves and increased environmental issues, engine modifications amid alternative fuels to improve performance are alluring a lot of attention nowadays. More than half of the total energy generated in the internal combustion engines are dissipated from the system through frictional losses, engine part cooling, exhaust, etc. The minimisation of these energy losses through heat transfer can improve the engine performance to an extent. The finest alternative for minimizing the energy losses through heat dissipations from the engine is with the use of thermal barrier coated (TBC) combustion chambers. In this paper optimum working condition of a single cylinder Kirloskar diesel engine with a ceramic thermal barrier coating (Yttriastabilized zirconia) on the piston was determined using Design of Experiments (DOE) software and predictions were validated experimentally. Further the multi-fuel performance of a diesel engine with ceramic coated piston was also analyzed. The fuels used were diesel, pure biodiesel and optimized biodiesel blend B20. The optimum working condition was determined by using central composite design method in Design Expert-7 software. The B20 fuel with TBC engine resulted to the maximum efficiency. Further it was validated experimentally by performing experiment at rated revolutions per minute (RPM) in a Kirloskar made single cylinder direct injection computerized diesel engine.Eventually a mathematical equation for the relationship between brake power, brake specific fuel consumption and brake thermal efficiency was derived using DOE software.